On Tuesday, Consumer Reports released its Annual Auto Reliability Survey, which takes into account data from more than 740,000 vehicles. It's a report that investors in the automotive industry should take notice of, as the magazine has more than 8 million subscribers and its report has an even wider reach through other media outlets.
With that in mind, here are a couple of surprises the report revealed for investors of Ford Motor Company (NYSE:F), Tesla Motors (NASDAQ:TSLA), and Fiat Chrysler Automobiles (NYSE:FCAU) -- and a look at which one came out the biggest loser.
Biggest improvement: Ford
Despite Ford ranking 16 out of 28 and remaining in the lower half of the rankings, the folks at the Blue Oval showed major gains. Nine of Ford's 13 models scored by Consumer Reports ranked average or better for reliability, and the brand overall jumped six spots higher from its ranking of 23rd last year, which was the biggest improvement of any brand.
Much of the reason behind Ford's jump is that the automaker has launched a plethora of new products within the last few years -- not only new models but new infotainment systems, powertrains, and transmissions -- and as those technologies mature, common issues are resolved and reliability improves.
A real positive sign for Ford investors is that the redesigned F-150 -- America's best-selling truck and Ford's most profitable product -- scored above average in its first year; although, on the flip side, the 2015 Mustang had reported issues with its drive shaft, traction control systems, and body hardware.
Biggest surprise: Tesla
It's important for investors and consumers to understand the difference between performance and reliability before judging Telsa's Model S harshly. While Consumer Reports stands by its opinion that the Model S P85D trim is the best-performing car it's ever tested, there are multiple issues popping up that are dinging the model's reliability.
Those issues include a host of problems with the drivetrain, power equipment, charging equipment, center console, and body and sunroof "squeaks, rattles, and leaks," according to Consumer Reports. Heck, on some of the issues the Model S scored worse this year than in last year's survey, including climate control, steering, and suspension systems.
Now, these issues need to be taken with a grain of salt, because owner satisfaction is still extremely high for the Model S, with 97% of owners saying they would definitely buy their car again.
One respondent explained to Consumer Reports why some noise complaints with the Model S might be overstated: "The car is so very silent when driving that minor squeaks and rattles that you wouldn't be able to hear in a gasoline engine car become very annoying."
All that said, Consumer Reports noted that Tesla's Model S doesn't receive the magazine's coveted "recommended" designation, and that promptly sent Tesla's stock price down as much as 9% on Tuesday.
Biggest loser: Fiat Chrysler Automobiles
Despite Fiat Chrysler Automobiles' sales increasing at a rapid rate in the U.S. over the last year, quality and reliability have failed to match its sales success. In fact, Fiat Chrysler brands all finished at or very near the bottom in Consumer Reports' reliability survey: Out of 28 brands, Chrysler ranked 22, Dodge ranked 23, and Ram, Jeep, and Fiat each took the last three spots in the rankings, respectively.
In response to Consumer Reports' reliability survey, Matt Liddane, vice president of quality for Fiat Chrysler Automobiles North America, said: "We greatly value customer feedback. We're significantly accelerating our pace of improvement. We need to continue to push harder."
The lone bright spot for Fiat Chrysler was that its Chrysler and Dodge minivans managed to post an average reliability score for the first time in many years -- but that's not much to hang your hat on after the umbrella of brands continues to lag behind the competition.